Live Blogging the Ira Sohn Conference

Investment professionals gathered in New York today for the annual Ira Sohn Conference, a sold-out show where prominent hedge fund managers and the like showcase their best ideas.

In years past, the confab has attracted high-profile names, including Stanley Druckenmiller, founder of Duquesne Capital; Seth Klarman of the Baupost Group; and Larry Robbins of Glenview Capital. David Einhorn of Greenlight Capital famously described a short against Lehman Brothers in 2008, months before the investment bank went belly up.

Steve Eisman, famed for his bet against the subprime mortgage market, said the market has been down on U.S. financials, thanks to rates being on hold and loan growth remaining elusive. But one area outside of the banks that he sees improving is the property and casualty insurance sector.

The entire financial sector has been beaten because there is no revenue growth, but Mr. Eisman believes property and casualty pricing will harden and revenue will begin to increase. He said playing the sector could take investors on a wild ride, especially during hurricane season.

Mr. Eisman sees the market turning around and suggested that the faint-hearted buy insurance brokers. For the bold, he recommended buying the larger and more diversified companies, like Aon. But he said the names with the most potential upside are pure property and casualty businesses in Bermuda.

“When the cycle turns, the upside in earnings could be considerable,” he noted.

The Ira Sohn conference brings together masters of the investment universe to pitch their ideas to the eager. But today, the master was the student. Sunjat Gorawara, a student at Indiana University, was named the winner of the Ira Sohn idea contest.

Mr. Gorawara is one of a hundred applicants in the contest. The winner is allowed to present his or her idea before the audience.

And the winning idea? Buy shares of Bridgepoint Education, a for-profit college, which has high gross margin and return on investment.

Acknowledging that at a previous conference, investor Steve Eisman called for-profit colleges a short idea, Mr. Gorawara said just because an industry may fit a certain profile doesn’t mean individual companies within it do.

He noted the demographic difference in Bridgepoint Education’s students — mostly women in their mid-30s, compared to early 20s at other for-profit colleges. He also took Senator Tom Harkin to task for citing a dropout rate at Bridepoint that wasn’t entirely accurate.

James Chanos, the head of Kynokos Associates, promised not to talk about China during his presentation at the Ira Sohn Conference. Instead, he took aim at the “greenies” or clean energy companies.

He said that the companies were poised for problems, as costs remain high and demand falters. Specifically, he attacked wind and solar energy companies. He accused Vestas, a wind energy company, of resorting to arguably questionable accounting to improve their financial picture. He said their cash flow had turned down dramatically and the company had declining returns on capital.

But, he said, he was most excited about shorting solar power companies. He called solar energy inefficient and noted that gas and coal runs rings around it in terms of price.

Mr. Chanos believes policy, rather than geniune demand, has driven installations. He cited European countries as having reduced their use of solar power, a major blow to demand. He said one C.E.O. his staff talked to said he planned to double capacity even if it meant prices dropped 50 percent.

His best short idea was First Solar, which he said uses a questionable technology and has serious operating problems. And to top it off, he said, the company is facing a management exodus. “They are seeing the same things we are seeing,” he said of the departing management. “We advise you to heed their warnings.”

Explaining why he favors Crosstex Energy, Phil Falcone, founder of Harbinger Capital Partners referred to its fundamental value as well as the company being a solid bet on oil and gas.

Mr. Falcone also offered a brief plug for his all-out bet on wireless venture LightSquared, which he said may one day become public, during a brief speech at the conference today. The venture represents a massive share of his hedge fund and remains private.

The tenor of the 16th annual Ira Sohn conference is something akin to investment speed dating. Managers step up and in 15 minutes try to offer a snapshot of what’s worth pouring money into.

To that end, Dinakar Singh, founding partner of TPG-Axon Capital, skipped the casual banter and cut to the chase.

He thinks the current market conditions will be optimal for stock pickers. With all the stimulus being pumped into the system, and the financial crisis that preceded it, the market has moved up and down in tandem, creating mostly beta. But he thinks when the liquidity faucet is turned off, you’ll be able to see what is and is not a really good value: “Now we get to see what the real economy looks like.”

His picks: Orkla, a Norweigian company with a clean balance sheet that he says has suffered mismanagement. But change is underway. Board members are likely to be replaced and restructuring the company could also assist share price, which he believes has a 30 to 60 percent upside.

Zhongpin, a Chinese pork processor, is also a buy. It has been a disaster recently, he said, as Chinese markets have sold off, which makes the food leader a good value. He said as Beijing pushes the consolidation of the food industry, Zhongpin will be on the winning side.

Sprint is his last bet. Not only because after years of being bludgeoned there are signs of change, but it’s also a long term bet on the U.S. mobile market, which will eventually be something like a utility, he said. And the recently announced acquisition of T-Mobile by AT&T will only make it more likely that the government will want Sprint to stick around as a viable competitor, he noted. That deal also grants Sprint a better bargaining position with potential collaborators like Lightsquared or Clearwire.

The conference has began, and starting things off is Erez Kalir, cofounder of Sabretooth Capital.

Scanning the crowd before his presentation, the grimly titled “Economic Death as a Special Situation,” he joked that he hadn’t stood before this many people since his bar mitzvah, where he had a much more authoritative text to rely on.

Mr. Kalir’s thesis is essentially that companies or even countries that are seen as economically dead present a potential opportunity for investors. So far, he’s listed MBIA as a company and Argentina as a country he would place his bet on.

In Argentina, Kalir sees the economy turning around since the country’s default in the early 2000s, and the best opportunity will be in the energy sector. He gave the examples of Crown Point Ventures and American Petrogras.

He also said America could be at risk of a financial accident.

So how to profit? He dismissed gold or shorting U.S. treasuries. The government could intervene and foil those plans. Instead, he said, try buying some farmland outside the U.S. Seriously.